KMPG is an accounting firm which provide assurance and consulting services to its clients. KMPG has two supporting departments human resources (HR) and information technologies (IT). KMPG uses number of employees to allocate HR costs and processing hours to allocate IT costs. For the first semester Of 2020, KMPG records the following costs: Budgeted cost before any interdepartmental cost allocations Number of employees Processing hours Auditor hours Consultant hours Required: Supporting Departments Human Resources Information Technology $ 800,000 Operating Departments Assurance Services Consulting Services $ 1,600,000 $ 15,625,000 $ 8,576,000 22 96 49 600 2,540 1,750 69,120 35,280 1. KMPG partners agree to allocate supporting departments costs based on a ranking of the percentage of their total services provided to other support department. The cost of the higher-ranking department would be allocated first. Allocate the supporting departments' costs to the operating departments using the step-down method. (11 points) Client A hires KMPG to audit its financial report. In addition, the corporate secretary department of Client A hires consultants from KMPG to produce a sustainability report. KMPG spent 2,400 auditor hours and 1,080 consultant hours for Client A. Calculate the total cost for Client A. (5 points) 2. 3. One of the KMPG partners argues that the supporting departments have reciprocal relationship. If the supporting departments costs are to be allocated using reciprocal method, what is the linear equation applicable for each department? (4 points)